The EU has launched the procedure due to excessive budget deficits in seven countries
The EU initiated an excessive budget deficit procedure against seven member states after the EU Council on Friday.
This, as the "European truth" writes, is stated in the message of the Council of the EU.
France, Italy, Belgium, Hungary, Malta, Poland and Slovakia were included in the procedure.
Voting on the start of the procedure began on Wednesday and ended on Friday.
- These countries will have four to seven years to take corrective action.
- On 19 June, the European Commission decided to include these seven countries in the procedure, as it considered that they had not taken any corrective action.
When a Member State's deficit exceeds 3% of its gross domestic product (GDP) and the debt exceeds 60% of GDP, an excessive deficit procedure is launched. All member states must adhere to these treaty indicators.
The excessive deficit procedure is designed to ensure that all Member States adhere to disciplined budgeting and avoid excessive deficits. The ultimate goal is to maintain a low level of debt or reduce it to an acceptable level.
At the end of the year, the EU Council will be invited to adopt recommendations based on the Commission's proposals, calling on member states to take effective measures to correct the deficit in a timely manner.
The European Commission is expected to make recommendations to the Council around November.
It will be recalled that King Philip I of Belgium called on the political leadership countries respond to the alarming situation with budget deficits.
As you know, the hole in the budget. .became a challenge for Germany as well – this issue was one of the reasons for the difficult "light coalition" negotiations about the budget.
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The reserve fund, from which urgent recovery and fortification are financed, is almost empty
In the State Budget Reserve Fund, from which the government allocates funds for urgent needs of restoration and fortification, only 592 million hryvnia of 56 billion UAH are provided for in 2024.
About it in the EP podcast "Chronicles of the Economy" told the chairman of the budget committee of the parliament, Roxolana Pidlas.
As part of the increase in budget expenditures by half a trillion hryvnia, of which 495 billion UAH will be allocated to the army, the government also proposes to allocate 4.5 billion UAH to replenish the State Budget Reserve Fund. This fund finances urgent expenses for restoration and reconstruction, as well as defense needs and the construction of fortifications.
- "When accepting the budget, about 42 billion hryvnia was laid in the Reserve Fund. During this year, the Cabinet of Ministers increased its size to 56 billion. However, only 592 million of this amount remains, "Pidlas said.
An abbreviated text version is also available: "We will return to the idea of increasing VAT". Head of Pidlas Budget Committee on Tax Review
Read more about the changes in the material: It is necessary to finance the war. What taxes will increase
We remind you:
Until the end of the year, the budget lacks half a trillion hryvnia to finance the defense sector. As a result, the Ministry of Finance government has developed draft budget changes for the corresponding amount.
They plan to fill the budget from four main sources: UAH 125 billion with the increase and introduction of new taxes, UAH 126 billion from savings on servicing and repayment of public debt, UAH 160 billion - from the placement of bonds of domestic state loan (OVGZ), UAH 89 billion - overfulfillment of existing taxes and fees.
It is proposed to increase the military gathering rate from 1.5% to 5% for individuals, introduce a military training camp for legal entities in the amount of 1% of income, introduce a military training camp for the FLP first, the second and fourth groups in the amount of 800 UAH per month, introduce a military training camp for the FLP of the third group in the amount of 1% of income.
This approach has been criticized. 13 think tanks proposed that the Cabinet of Ministers increase VAT rather than military training. The initial proposal of the government provided for an increase in the VAT rate from 20% to 22-23%, military training - from 1.5% to 5%. In addition, it was expected that the latter would be paid by the individual entrepreneurs.
The Ministry of Finance believes that they offer the mildest option of financing additional military needs among all possible. It was assumed that budget and tax bills would be adopted in both readings in July, but on July 23, the Ukrainian parliament announced a break until August.
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